You'll blow $1.9 billion on flowers alone. But 36% of Moms just want something handmade
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It would be great if some of the everyday annoyances consumers encounter while shopping, traveling, and going to the movies would simply disappear. Unfortunately, in all likelihood that just ain’t gonna happen. But it may help a little to at least understand exactly why the powers that be seem to intentionally be inconveniencing, confusing, and ripping us off at every turn. Here are the reasons behind 7 common shopper complaints.
It’s fairly common knowledge that grocery stores place milk, eggs, and other staples far away from the entranceway in order to tempt shoppers into buying all sorts of other goods they must walk past. This is undeniably one reason why supermarkets inconvenience the shoppers who’d love to be able to get in and out on quick errands.
An NPR story points out, though, that there’s another, more practical reason for the placement of the milk, and it has nothing to do with coaxing customers into making impulse purchases. Another theory for why milk is usually in the supermarket’s back corner holds that this location helps keeps costs down. Milk is a heavy product, it needs to be restocked regularly, and it requires refrigeration. Delivery trucks can pull right into the back of the store near where the milk winds up for sale. That’s simpler and more cost-effective and keeps milk fresher than if the cartons were lugged through stores and stocked in refrigerators that are, say, right near the cash registers.
The restriction on bringing liquids through airport security checkpoints means that anyone wanting a bottle of water while waiting for a flight has no choice but to buy in the terminal—and pay rip-off airport prices. At Los Angeles International Airport, the price of bottled water is so inflated ($5) that a lawsuit was filed. To some extent, the situation boils down to simple price gouging: Retailers know that there are no real other options if travelers want bottled water, so stores can charge whatever they want and people have little choice but to pay up.
Yet a Wall Street Journal report points out that there are legitimate cost factors that lead to higher prices for water and other products sold at the airport:
Airport stores are small, so there’s limited space for inventory. They also require off-airport warehouses. Deliveries to stores are often limited to off-peak hours and have to be made in small containers, because everything needs to pass through security screening. Employees have to be badged by airports and pass through security. All that adds time and cost.
Grocery stores and warehouse clubs like Costco regularly sell cooked and seasoned, ready-to-eat rotisserie chickens at prices that are cheaper than uncooked chicken in the meat aisle. At first glance, this makes no sense. Cooked chicken is pricier to prepare, so why isn’t it cheaper to buy poultry you’ll cook at home?
One explanation is that the rotisserie chicken is a “loss leader” meant to drive shoppers into the store when it’s late in the day and they’re desperate to pick up something easy to serve for dinner. Supermarkets might not make much money on these sales—in fact, they may lose money, hence “loss leader”—but they’re successful if they bring in a customer who might not otherwise be browsing the store.
The other explanation for curious chicken pricing is that supermarkets sell lots of cooked chickens when supply is high and some are likely to go bad in the near future. Stores may make less money on rotisserie chickens, but at least they’re not throwing the chickens away. What’s more, if the rotisserie chickens don’t sell, the meat can be used in soup, chicken salad, and other profitable deli items.
Consumer life would be simpler if prices were round numbers—$12 rather than $11.99, for instance. But apparently the so-called “left-digit effect” has a big impact on shoppers’ decisions, and the first digit in a number makes a much larger impression than what comes at the end. So $11.99 seems like a much better deal than $12, even though there’s only a measly 1¢ difference.
Research cited by The Atlantic reveals that stores can grab the attention of customers in a different way by utilizing extra-screwy pricing that ends in, say, .78, .67, or .21. Shoppers have grown so accustomed to seeing prices end in .99 or .95 that they become a blur. But when an item features an unconventional price ($21.68 say), it registers in a way that $21.99 or the flat $22 do not. The shopper is more likely to pause, take note, and (the store hopes) consider purchasing the item, as the special pricing is used to connote, well, special pricing—specifically, a deal.
Another reason for such oddball pricing is that they’re part of a retailer’s secret code that helps stores keep track of various discount strategies. Employees at Gap and Old Navy know that their cheapest prices will end in .*7, while Target’s lowest clearance prices end in .*4. At least that’s what the prices meant not long ago. Retailers know that savvy shoppers have caught on to such pricing systems, and they’ve been known to tweak the code to keep customers on their toes. Don’t put it past stores to also use this kind of unusual pricing to grab shoppers’ attention and lead them to assume it’s a special deal even though the item isn’t even on sale.
More often than not, it’s difficult if not impossible to see how much the sparkling items underneath glass in jewelry stores cost. This may very well frustrate customers, but as one jewelry store worker told NPR, the absence of prices is a carefully calculated strategy. To find out how much something costs, customers must talk to a clerk, who will be able to tell the story behind the item, discuss how it fits into fashion trends, remove it from the case for a closer inspection, and so on. By this point, the sales pitch is well under way.
Studies have also shown that when consumers physically hold merchandise, they’re more likely to develop an emotional attachment and a sense of ownership. Not only are shoppers more apt to buy items they’ve touched, they’ve shown a willingness to pay more money for them compared with stuff that’s been kept at a distance.
OK, the obvious answer is that movie theaters charge ridiculous markups on popcorn and other concessions because they have a captive audience and people will pay. As this in-depth Marketplace report explains, however, there’s a bit more to it.
One might think that theaters could actually boost profits by lowering prices on concessions and enticing many more moviegoers to get snacks and drinks. But those in the business are under the impression that filmgoers fall largely into two consumer categories—big spenders and extremely price-sensitive—and whatever money is earned from the latter would be negated by lower prices charged to the former. Also, it should be noted that theaters make very little money from ticket sales, meaning it’s essential for the business to milk customers for as much as they can at the concession stand. If it weren’t for rip-off concession prices, ticket prices would have to be much higher, and neither moviegoers nor movie theaters want that.
Last fall, an Oregon man sued Costco for $670,000 for an incident in which he refused to show his receipt when leaving the store—and in which his leg was broken in multiple places in a scuffle with employees that allegedly followed. One might ask: Why do Costco and some Walmarts, Best Buys, and other major retailers demand to see receipts in the first place?
There isn’t a big mystery here. The receipt check is a loss-prevention measure. The point is to lower theft, mostly by discouraging it with a policy in which everyone will be eyed over upon leaving the store. This doesn’t stop people from being miffed about confrontational store employees treating paying customers like criminals.
Some retailers say receipt checks aren’t necessarily about shoplifting, but that employees are there to ensure customers have the correct model they were charged for, or supposedly provide some customer service along those lines. “That’s garbage,” one anonymous Best Buy staffer explained to the Consumerist. “It’s patronizing, and you deserve to feel insulted by statements like that.” Still, the Best Buy employee maintains the policy is a good one for retailer and customer alike, because without it, theft would rise and prices would have to increase to make up for the difference.
Apparently, treating everyone like a criminal makes actual would-be criminals give pause to stealing from stores.
Travel should be pleasurable — not stressful. While it’s almost inevitable for something to go awry from time to time, you can avoid most issues with a little foresight and planning. Sometimes all it takes is investing a bit more upfront in order to ensure a better travel experience.
Take a look at these nine things you should never skimp on when traveling.
I’m not including accommodations or method of travel on this list because I think those two items are relative. Some people like five-star hotels and first-class seating, while others are perfectly fine in hostels and economy class. To each their own.
What we can all agree on, though, is that decent luggage is an important trip component for several reasons, namely because it needs to hold up against all the wear and tear you’ll put it through in your travels. I’m not saying that cheap luggage will fall apart and expensive luggage is bar none, but there is something to be said about brands with a reputation for quality — and that usually comes at a cost.
Personally, I prefer Herschel Supply Co. for my luggage, while my husband likes Tumi. Those aren’t endorsements (I don’t have any affiliation with either of those companies), but rather suggestions to help inform your future purchase if you’re in the market for sturdier luggage.
A lot of people vacation in warmer climates. And why not — there’s an abundance of things to see and do when the weather outside is perfect. But before you head out to explore, make sure you’re wearing comfortable shoes and socks that can handle a day of walking without killing your feet. These should be the real deal — and definitely not right out of the box. You also want to avoid going sockless. I’ve worn both canvas slip-ons without socks and flip-flops on heavy walking days, and both footwear choices resulted in bloody, painful feet.
Because I live in New York City, I’m generally not afraid of new surroundings, seemingly seedy neighborhoods, or people who look like they might be up to no good. I stay vigilant, of course, but I don’t want to let a black cloud of fear follow me wherever I go just because the area doesn’t look like it’s maintained by Ritz-Carlton. There was a time in the Bahamas, however, that this joie de vivre could’ve gotten my friends and me into a sticky situation while traveling down a lonely road from one club to another — a mistake I’ll never make again. Now I loosen the purse strings and spring for a cab to avoid a potentially dangerous situation.
Safety first, people.
Finally, we’ve gotten to the fun part — activities! I’m an activities-oriented guy, and I like to be out and about experiencing everything I can in the short time I have in a location. The problem, however, is that an unforgettable experience can be costly. Still, it’s not something on which you should skimp — your fond memories of your trip will last much longer than any tchotchke — and there are ways to make it affordable.
Remember when I mentioned earlier that the preference for high-end flight and hotel accommodations are relative? They still are, and personally this is how I justify splurging a bit on a great experience — I choose to stay in modest digs and fly the cheapest way I can, so when I get to my destination I can have all the fun I want without feeling guilty for spending too much money.
I once went on what was meant to be an unforgettable European vacation that included London, Dublin, and finally, Paris for New Year’s Eve. But thanks to Mother Nature and an incompetent, famously low-priced Irish airline that shall remain nameless, my hopes of ushering in a new year in the City of Lights were dashed. The worst part? I was young and dumb and I didn’t have travel insurance. Hotel, train fares, and airfare all went out the window — along with my usually jovial attitude. Don’t let this happen to you, especially if you’re planning a special-occasion trip. Spend the extra money to protect your investment.
I suspect that pre-travel vaccinations are not only overlooked a lot of the times, but probably actively avoided sometimes due to cost and inconvenience. In that case, let’s play a game of “Would You Rather?”
I’ll go first.
Would you rather pay for pricey vaccinations that will help you avoid common illnesses, or would you rather spend your trip becoming besties with a toilet and visiting the very questionable local hospital?
Get the proper vaccinations before you depart. If you can’t afford it, don’t go. In some cases, it really could be the difference between life and death.
Speaking of questionable local hospitals, they’re the very last place you ever want to visit while you’re traveling — even worse than jail. If you’re ill, spring for quality medical care.
Blogger behind Broke Girl Gets Rich, Chelsea Baldwin, just wrapped up a few years in Asia, and soon she’ll embark on an extended stay in South America. As someone who has caught her fair share of stomach bugs while traveling and was subsequently treated at public health facilities, she advises better-quality healthcare as well.
“If the public health care in the country you’re visiting is known for its quality, that’s fine, but otherwise it’s always worth the extra cost to get more attention and better care from a private doctor,” she says. “Most American health insurance companies will cover you for emergency situations overseas, but if you think the cost of visiting a private doctor at your destination could get expensive, there are numerous travel insurance companies you can get plans from to help cover you.”
When I travel to destinations outside my wireless provider’s coverage area, I try to stick with the hotel’s free Wi-Fi. If you want to be fully connected — it’s not a bad idea despite the faction of people begging us to unplug every once in a while — there’s a solution that will cost you a few bucks. Still, it’s much cheaper than the fees you may incur from your provider.
“Buying a SIM card upon arrival in a country will cost you little more than $10 to $15 and it’s invaluable for all the times you get lost or you’re unable to communicate with your cab driver,” says Matthew Newton, CEO of Tourism Tiger. “Many small emergencies are solved through the simple asset of a SIM card charged with one gigabyte of data.”
My Wise Bread colleagues and I generally try to steer you clear of buying bottled water, but Dr. Irene S. Levine (who moonlights as a freelance travel writer) makes a good case for bottled water when you’re traveling.
“There is no reason to take a chance,” she says. “Even if tap water is safe to drink, it may have a different mineral composition that is upsetting to your stomach and can potentially ruin your trip. Additionally, don’t try to save money by not drinking enough water. When you’re traveling, it’s easy to get dehydrated either on planes or in hot climates when you’re more active than usual.”
As someone who prefers tap water, I agree that this is a good practice to adopt, especially when traveling outside the United States. To save money and waste, consider buying a few large jugs of distilled water with which you can fill your permanent water bottle, instead of buying many single bottles the whole trip.
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Accenture surveyed 10,000 people in the U.S. and a handful of other countries about buying cars, and the results show that most consumers aren’t exactly fans of the standard car dealership experience. In fact, three-quarters said that “if given the opportunity, they would consider making their entire car-buying process online, including financing, price negotiation, back office paperwork and home delivery.”
Some cultures are keener on purchasing via the web than others. Overall, the poll showed that Chinese, American, and Brazilian drivers are “more interested in online digital experiences than other countries,” specifically countries in Europe. For instance, 75% of Brazilians and 90% of Chinese would buy a car in an online auction, versus 45% of Germans and just 35% of French.
The survey findings didn’t reveal all that much about why consumers don’t seem to think it’s important to make the big-ticket purchase of an automobile the old-fashioned way, in person at a car dealership. But anyone who has bought a car probably has an idea about why online purchasing is appealing. For many, buying a car at a dealership is too much of a confusing, high-pressure, unreasonably long process. It’s easy to see how it’s preferable to haggle over prices and options and review the fine print at one’s leisure in front of a screen rather than surrounded by salespeople and their “let me talk to the manager” games. After all, a classic negotiation tactic is walking away from the deal on the table, and walking away from an online offer is as simple as ignoring an email.
For another indication of the degree to which consumers don’t like the traditional car-buying experience, check out a recent survey conducted for Autotrader. Of the 4,002 consumers polled, only 17 said they like the current car buying process just as it is. The rest said they “want significant changes, particularly in the test drive, deal structuring, financing paperwork and service phases.” Many said they’d like to see the nitty-gritty of deals conducted online rather than in person. For instance:
Consumers indicate that they would like to see a big change in the way they go about negotiating the deal structure. Of those who liked the idea of online deal building, over half, 56 percent, want the ability to start the negotiation on their own terms—preferably online—and 45 percent would like to remain anonymous until they lock in the deal structure.
Nearly three fourths of consumers, 72 percent, want to complete the credit application and financing paperwork online. The key factors driving this desire are to save time at the dealership (reported by 72 percent of those who favor online paperwork) and to have less pressure while filling out paperwork (reported by 71 percent of those who favor online paperwork).
There’s no big mystery as to why car dealerships and automakers are reluctant to make online vehicle purchasing more practical and readily available. Doing so would put car sales staffers out of jobs and likely result in lower profits for automakers and dealerships. Let’s not forget that one of the supposed purposes of car dealerships is to provide a place for consumers to kick the tires, test-drive vehicles, and (hopefully) get good insights and advice from employees. A car is a major purchase, and a good car dealership will help steer you in the right direction.
Nonetheless, there’s considerable pressure to change the often-maddening experience—to make it quicker, more transparent, less stressful, and less complicated—and some auto brands are becoming more open to online purchases.
“There aren’t too many things out there anymore that you can’t buy in an online way, and it’s really automotive that’s lagging pretty much every other industry out there,” Doug Murtha, Scion’s brand chief, acknowledged in a recent Bloomberg story about how the Toyota-owned brand is attempting to make car purchasing “Feel More Like Buying an iPad.”
Most customers have been able to use Scion’s new options to buy a car in less than two hours—less than half the usual time suck—and the goal is to get the process chopped down to under an hour. Meanwhile, some Auto Nation dealerships in South Florida have been attempting to make it possible for shoppers to seal the deal on a new or used car in a Domino’s-delivery-like 30 minutes or less, thanks to customers doing much of the browsing and completing of paperwork online in advance.
By most accounts, the Apple Watch did a terrific business on the first day customers could place preorders. Apple reportedly received roughly one million orders last Friday, and demand has been so high that orders placed now won’t be delivered until June or even later in the summer.
The first customers who preordered Apple Watches, however, will have their shiny gadgets in hand starting on April 24 or soon thereafter. Part of the draw of being an early adopter is the opportunity to get one’s hands on the newest tech before everyone else, and a certain group of consumers is sure to be too impatient to wait until summer to get their hands on the new Apple Watch.
Naturally, this combination of strong demand and limited short-term supply led Apple Watches to begin appearing for resale on eBay almost as soon as Apple started accepting preorders. As ReCode noted over the weekend, most eBay listings for Apple Watches were of the “Buy It Now” variety, in which sellers post a flat price for the item rather than putting it up for an online auction. We probably shouldn’t be surprised that some sellers appear to be exceptionally opportunistic and greedy, occasionally posting “Buy It Now” prices that are 200% to 600% higher than retail.
Mind you, anyone can place an order and pay the retail price at the Apple Store for these exact same watches; the only reason anyone would pay a premium for an Apple Watch via eBay is that—assuming the listing is legitimate—you’d be able to show it off a few weeks sooner.
OK, so people selling stuff online are trying to make a quick buck by taking advantage of impatient Apple fans: Nothing new here. Are people actually paying up?
In some cases, they are indeed, but often not to the extent that sellers might hope. In one eBay auction that closed on Monday, a 42 mm Stainless Steel Apple Watch with link bracelet that retails for $999 was purchased for $1,400. Another Apple Watch, a 38 mm with a Black Sport Band, received 20 bids and sold for $561, barely over the retail price ($549). The results of some of the online auctions ending on Monday were puzzling: In one auction for a 38 mm Stainless Steel with Black Classic Buckle Apple Watch, the final bid was $610 (original price: $649), while a 42 mm version of the same Apple Watch (original price: $699) went for $910 in an auction that ended at almost the exact same time on Monday afternoon. Yet another Apple Watch auction that ended Monday, for a 38 mm model that retails for $349, wound up selling for $480.
It’s hard to draw many conclusions about the height of Apple Watch demand and the state of consumer patience from such all-over-the-map results. One thing that’s particularly interesting is that dozens of listings with “Buy It Now” prices and many with side-by-side “Buy It Now” prices and high starting bid prices came and went on Monday after attracting no bids whatsoever. For instance, no one bid on a 42 mm Milanese Loop Apple Watch listed at a “Buy It Now” price of $1,499, which shouldn’t be surprising considering the gadget can be purchased at retail for just $699.
Obviously, some sellers are trying to test the market with the hopes of making as large a profit as possible on their timely device purchase. In general, buyers are paying only moderate premiums in Apple Watch resales. For now at least, it looks like consumers aren’t going completely overboard in the quest to slide an Apple Watch onto their wrists a few days before their neighbors and coworkers.
The last thing most consumers want to hear—especially around April 15—is that they should be paying more in taxes. But for a wide range of reasons, including health, safety, fairness, the environment, and simply raising more funds for government projects and infrastructure, some say higher taxes are needed in the following categories.
“In 1951, the federal excise tax on a standard shot of 80-proof whiskey was about 90 cents in today’s dollars. Today it stands at about 13 cents, a seven-fold decrease,” the Washington Post noted recently. “The real federal beer tax has fallen about fivefold over the same period, with a more modest drop for wine.”
That and other articles point to new research from the University of Florida, which shows that higher alcohol taxes can save lives—because people drink less when booze costs more. “Alcohol tax increases implemented across the country could prevent thousands of deaths from car crashes each year,” said Alexander C. Wagenaar, a UF College of Medicine professor and one of the researchers involved in the study.
Commonly referred as a junk food tax, the Healthy Dine Nation Act went into effect on April 1 in the Navajo Nation, which extends into parts of Arizona, Utah, and New Mexico. The law adds a 2% tax on chips, fried foods, soda and other sweetened beverages, and other products with “minimal-to-no-nutritional value.” Funds raised from the tax are supposed to be allocated to health initiatives, including exercise facilities and community gardens. The tax is also aimed at dissuading people from eating poorly—diabetes, hypertension, and cardiovascular disease are all big problems on the reservation.
The idea of a state or national junk food or “fat tax” surfaces from time to time, with proponents calling special attention to how costly obesity is. “America spends $96 billion treating diseases caused by cigarette smoking—far less than the $190 billion spent on obesity,” the Committee for Economic Development noted last fall. Yet some research indicates that to be noticeably effective in changing consumer behavior, a junk food tax has to be big, perhaps 20% or higher.
While a blanket junk food tax would include soda and sweetened beverages, some health advocates specifically target soda as especially appropriate for a new tax. The nation’s first soda tax was passed in Berkeley, Calif., last fall, and lawmakers in San Francisco have been trying to reduce soda consumption, via possible taxes and package warnings among other measures. Several other cities have tried (but failed) to institute soda taxes, and we’ll have to wait and see if Berkeley is a trendsetter or an oddball anomaly. One 2014 study suggests that a tax equivalent to 6¢ on each 12-ounce soda would significantly curb soda consumption.
The idea of hiking gas taxes has grown more popular since gas prices collapsed in the U.S. The national gas tax hasn’t budged since 1993, and the thinking is that people will be more open to higher gas taxes at a time when the cost of gas is cheap. Forecasts call for gas prices to stay low indefinitely, and that makes it more likely that a gas tax increase will happen.
One problem with taxing gas is that today’s drivers use less of it, thanks to the rise of alternative-fuel cars and across-the-board improvements in fuel efficiency. After all, when people use less gas, they pay less in gas taxes too, and plummeting gas taxes collected means that there are fewer funds to keep our highway infrastructure from crumbling further.
One frequently suggested alternative to taxing gas is taxing miles driven. This concept is riddled with unknowns, but we should all know more about how such a system would work in the near future. An experiment charging a few thousand drivers 1.5¢ per mile gets under way in Oregon starting this summer.
According to a 2015 Pew Charitable Trusts study, two states already tax e-cigarette sales (North Carolina and Minnesota), and proposals to add e-cigarette taxes have been on the table in at least a dozen more states. Among them, Ohio is considering a tax that would effectively triple the current cost of electronic cigarettes.
Last month, a group of U.S. senators introduced a new version of the Marketplace Fairness Act, which would allow states to collect sales tax on purchases made in other states. Somewhere between one-half and three-quarters of American consumers already pay sales tax on Amazon.com purchases, but there are many examples of online purchases that still aren’t taxed.
“The free ride,” as a recent Pittsburgh Post-Gazette editorial called it, “comes at a cost: a decline in tax revenue, with a corresponding decline in government service, and a system that unfairly favors online retailing behemoths at the expense of brick-and-mortar stores close to home.”
Starting this Friday, customers can place preorders for the Apple Watch, the first entirely new product from Apple since the iPad. Analysts are predicting that Apple will sell somewhere between 8 million and 41 million Apple Watches—not just on Friday, mind you, but for all of 2015. Should you be one of these buyers? To answer that, you should first address the five questions below.
Is it just too bulky and ugly to wear? There’s a fair amount of skepticism that many people—women in particular—will voluntarily place a mini-computer on their wrists and walk around in public. Allen Adamson, chairman of the branding firm Landor Associates, told the San Jose Mercury News that Apple Watch owners will be overwhelmingly male because the gadget, while smaller than most smartwatches, is too big and bulky for women’s wrists (and tastes). “If it didn’t skew 70-30, I’d be surprised,” he said.
Gawker called the Apple Watch the company’s “dorkiest luxury item yet,” and circulated a very Gawker-y idea that everyone should take a pledge to refuse to have sexual intercourse with anyone wearing (or even owning) said gadget.
Others had more kind things to say about the Apple Watch as a fashion accessory. Joshua Topolsky of Bloomberg described the Apple Watch as “beautiful in a surgical way,” which is not the same as saying something’s simply beautiful: “Apple’s design doesn’t compete with Rolex, Omega, or Breitling for sheer style, but the more I wore the inconspicuous thing, the more I liked it on my wrist.”
In her review, the Wall Street Journal’s Joanna Stern called the Apple Watch “a status symbol, a sign of wealth and taste,” as well as “an accessory I love to wear all day long.”
Will it help you focus? Or be one more distraction? “Do I really need another connected screen blinking, beeping and buzzing all day?” That question, asked in another Wall Street Journal review (by Geoffrey A. Fowler), is one that people have been asking since the advent of smartwatches. Theoretically, some of the appeal of the Apple Watch is that it will free us from the compulsion to eyeball our iPhones every 30 seconds. But because the Apple Watch must be in close proximity to the user’s iPhone to be fully functional, Apple is effectively now trying to convince us all that we must walk around with not one but two mini-computers on our person at all times.
This seems like overkill, if not plain insanity. And yet, even if the Apple Watch is not a substitute for a smartphone, most reviewers noted that they turned to their iPhones less frequently while they were wearing Apple Watches. Having the watch on Fowler’s wrist “has made me more present,” he wrote. “I’m less likely to absent-mindedly reach for my phone, or feel compelled to leave it on the table during supper.”
On the other hand, Topolsky’s review begins by focusing on how the Apple Watch interrupted his day dozens of times, typically with useless messages that aren’t quite as easy to ignore as tweets and emails because they’re coming from a vibrating device on your wrist. If part of the pitch is that the Apple Watch will “help me stay in the moment, focused on the people around me,” Topolsky wonders, “why do I suddenly feel so distracted?”
Would you really use it to pay for stuff? For the most part, reviewers say that the ability to make purchases with the Apple Watch (via Apple Pay) is one of the gadget’s strengths. “Apple Pay on the watch is even easier to use to buy stuff at retail then on the iPhone,” wrote Edward C. Baig, tech columnist for USA Today. “Once you’ve set up the cards you’ll use, double-tap the side button when you’re about to pay. You’ll see the default credit card you selected (and can swipe to any other cards you’d rather use). Hold the phone next to the terminal, and if all goes as expected the transaction will almost immediately go through, as it did in my tests at McDonald’s and Whole Foods.”
In his expansive (and mixed) review, Nilay Patel of The Verge called Apple Pay “my favorite part of the entire Watch, a little blast from the future.” He too noted that paying via Apple Watch is “even faster than paying with an iPhone, since it doesn’t have to read your fingerprint; it’s ready to go anytime after you put it on your wrist and unlock your phone with your fingerprint. I love using Apple Pay with my phone, but it’s even better with the Watch, some mild contortions to line it up with payment terminals aside.”
But just because Apple Pay via Apple Watch is better than Apple Pay via smartphone doesn’t mean that it’s more practical than paying with plain old cash, credit, or debit. A recent report from Phoenix Marketing International showed that tons of iPhone owners have run into hassles when attempting to use Apple Pay: Two-thirds reported problems at checkout, 47% have tried but were unable to use it in stores listed as Apple merchants, and nearly half say they used Apple Pay once and never again.
Is it just too new, with too many bugs? Every early adopter should know that the tradeoffs for being on the cutting edge include the risk that the new tech is mostly hype (see: 3-D TV), doomed to failure (Fisker Karma), or simply riddled with hiccups (nearly every 1.0 gadget). In his review for the New York Times, Farhad Manjoo reported that the Apple Watch “works like a first-generation device, with all the limitations and flaws you’d expect of brand-new technology.” Among other issues, Manjoo noted, “third-party apps are mostly useless right now.” Ultimately, he came away falling in love with the gadget, but only after “three long, often confusing and frustrating days,” which is probably not the endorsement Apple was hoping for.
Over at The Verge, Patel cut to the chase and declared the Apple Watch “kind of slow,” with glitches galore:
There’s no getting around it, no way to talk about all of its interface ideas and obvious potential and hints of genius without noting that sometimes it stutters loading notifications. Sometimes pulling location information and data from your iPhone over Bluetooth and Wi-Fi takes a long time. Sometimes apps take forever to load, and sometimes third-party apps never really load at all. Sometimes it’s just unresponsive for a few seconds while it thinks and then it comes back.
Apple will surely address these and other issues encountered by early Watch buyers. In the meantime, early adopters should remain patient, and expect periodic (hopefully not chronic) problems. The easy alternative is to simply wait for Apple to increase the battery life, tweak the software and design, and otherwise smooth things out with the inevitable second version of the Apple Watch.
Is what you get worth the price? This is the question at the heart of every purchase decision, isn’t it? The Watch starts at $349 and can go over $10,000. You’ll have to decide for yourself if any amount in that window represents money well spent. The “Bottom Line” from CNET sums up the consensus take: “The Apple Watch is the most ambitious, well-constructed smartwatch ever seen, but first-gen shortfalls make it feel more like a fashionable toy than a necessary tool.”
Few people will argue convincingly that you truly need an Apple Watch, though many of us will surely want one, even though its true utility may still be something of a mystery at this point. Pre-orders can be placed starting at 12:01 on Friday, April 10, via the Apple Store.
When Nike Inc NIKE INC. NKE -0.11% announced mixed quarterly results two weeks ago, I suggested at the time that investors were right to celebrate. Even though Nike’s 7% revenue growth missed expectations thanks to foreign currency headwinds, shares of the footwear and athletic apparel behemoth climbed more than 4% to a new all-time high that day.
Excluding the effects of foreign exchange, however, Nike’s revenue would have climbed 13%, including 11% growth in Nike brand revenue to $6.9 billion. Nike also exceeded estimates for earnings, which grew 19% to $0.89 per share.
But the fact that Nike’s overall growth outpaced that of its namesake brand indicates that it had another smaller, faster-growing source of revenue to make up for the difference — a secret weapon, perhaps, operating under the radar and bolstering the rest of the business.
For that, look no further than Nike subsidiary Converse, sales from which grew an impressive 28% (33% excluding currencies) last quarter to $538 million. For perspective on that growth, Nike acquired Converse for just $305 million back in July 2003, when the smaller brand had annual sales of just $205 million.
So after nearly 12 years under Nike’s wing, why is growth at Converse accelerating now?
According to Nike CFO Don Blair in the company’s follow-up conference call, Converse’s performance was “boosted by the acceleration of Q4 shipments in advance of a major systems go live.” Meanwhile, Blair elaborated, “The balance of the growth was driven by continued strength in North America, the conversion of several European markets to direct distribution, and strong growth in [direct-to-consumer].”
That’s fair enough. After all, three months earlier, Blair cited similar factors as driving Converse’s 21% growth in the previous quarter. And at the same time, he noted that Converse’s earnings before interest and taxes fell 12% because of “investments infrastructure, demand creation, and DTC to enable long-term growth.” It would appear, then, that we’re beginning to see the fruits of those investments.
But we also shouldn’t forget the more difficult-to-measure impact of Nike’s decision to finally crack down on Chuck Taylor lookalikes last October. Specifically, that’s when Converse filed 22 separate trademark infringement lawsuits against 31 companies for their alleged illegal use of core design elements of Converse Chuck Taylor shoes.
To be fair, Nike tried to avoid the courts, saying it had served around 180 cease-and-desist letters to the defendants since 2008. But when nothing else stopped the accelerating flow of Chuck Taylor knockoffs into the market, the courts became Nike’s primary avenue for defending the iconic Converse brand.
As it turns out, the lawsuits are proving extremely effective so far. According to a report from Fashionista in February, Converse has already voluntarily dismissed a number of the cases after coming to agreements with prominent defendants including H&M, Tory Burch, Zulily, andRalph Lauren.
And while the exact terms weren’t disclosed, U.S. International Trade Commission documents a few weeks earlier confirmed that the ITC had found 36 Ralph Lauren shoe styles in violation of Converse trademarks. As a result, Ralph Lauren agreed not only to pay Converse monetary damages, but it also would be required to destroy all infringing shoes, as well as any associated molds, tools, and marketing material.
Of course, it’s hard to tell just how much of a positive effect this has had, especially since Converse was growing nicely before its legal actions. But if one thing seems sure, it’s that Converse is more popular than ever before. In the end, with its competition effectively neutralized and Nike piling cash into marketing, infrastructure, and direct-to-consumer channels, Converse appears poised to play an increasingly important role dictating the fortunes of Nike shareholders for the foreseeable future.